Big businesses often employ people assigned to conduct a competitor analysis regularly. The main objective of this process and filling out a competitor research template is to assess the strengths and weaknesses of your competitors and pinpoint any gaps in the marketplace. This analysis will help your company improve your services or products so you can serve your customers better. It could also lead to an increase in profits, Most of the successful companies know the importance of analyzing their competitors at different stages of their businesses.
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Competitor Analysis Templates
What is competitive analysis?
Competitor analysis is a business plan that entails comprehensive research of your main competitors for the purpose of gaining insights into their sales, marketing strategies, and products. Based on this analysis, you can develop and implement better business strategies, ward off your competitors, and capture a bigger share of the market. This analysis will also help your company:
- Learn how your competitors work and pinpoint potential opportunities for you to outdo them.
- Be always be on top of the market trends to ensure that your service or product is consistently meeting or even exceeding the standards.
- Identify the unique value proposition of your service or product and what makes it stand out from the competitors. This is very helpful for your marketing efforts in the future.
- Identify what your competitors do well so you can keep staying relevant while ensuring that both your marketing campaigns and product outperform the market standards.
- Pinpoint where your competitors fall short. This will help you pinpoint the areas of opportunities in the marketplace so you can test out new marketing strategies that your competitors haven’t tried yet.
- Learn through customer reviews what’s missing in the product of your competitors and think about how you can add those missing features to your product.
- Provide your company with a benchmark against which you can measure your company’s growth.
Competitive Matrix Templates
Why do you need a competitor analysis template?
The main purpose of conducting a competitor analysis and creating a competitive matrix template is to learn about and understand the strengths and weaknesses of your competitors, then compare them with your own. You need to do this study for several reasons:
- To help you recognize how to improve your business strategy.
- To tell you how to outperform your competitors in areas that will attract the attention of your customers.
- To give you a competitive edge over your competitors.
Before conducting this analysis, you need to understand your competitors first. You can do this by answering these questions:
- What service do they provide or what product do they offer?
- Do you share the same or similar target audiences?
- Do they operate close to your business?
Remember that the competitors in your locale aren’t your only competitors. Remember that the competitors you choose for your analysis will determine the insights you will gain and that you will base the decisions you will make partly on those insights. This is one reason why including the different types of competitors is essential:
Direct competitors
These competitors offer the same services or products as you. They’re also aimed at the same customer base and market with the same goals of market share growth and profit. Direct competitors target the same audience, sell the same products, and have the same distribution model.
Indirect competitors
These competitors belong to another company that offers the same services or products as direct competitors. But the difference is that your end goals aren’t the same.
Substitute competitors
These competitors also belong to another company that offers services or products to your customers that you provide too.
After determining the type of competitors you will compare your business with, it’s time to conduct the analysis.
Competitor Research Templates
How to conduct a competitor analysis?
As a small business owner, you might find yourself juggling several tasks all at once. But even with such a busy schedule, it’s always worth sparing some time to do a retail competitor analysis or any other analysis depending on the nature of your business. Following are steps you may want to consider when conducting the process.
With this analysis, you can draw conclusions about your product’s weaknesses and strengths if you learn more about your competitors. You need to know your company’s strengths to determine your position in the market. Therefore, it’s necessary to communicate clearly to your customers why the service or product you offer is the best choice available.
Knowing your weaknesses is also important in the growth of your company. If you can understand where you fall short, you can identify the areas where you want to invest more resources and time. This is why you need to study your competitors to find out what they’re doing right and see if you can improve your business through the insights you gain. Here is the process for conducting this analysis:
Understand the market
Before identifying your competitors, you might discover that there are companies that you’ve never heard of before so you didn’t consider them competitors. If you want to do better than the competition, you must know all of them first. You need to conduct a thorough evaluation of what your competitors offer as this could help you identify the areas where you aren’t performing well.
You might also discover gaps between your competitors’ offerings and your customer’s needs. If you do, make this your first move when expanding your offerings so that you can satisfy those unmet needs.
Spot the trends in the industry
You need to find out which way the industry leans towards. But you shouldn’t just do it because your competitors do it too. Copying your competition without considering your place in the market rarely leads to success.
Don’t just replicate what your competitors offer either. A better alternative is to evaluate the needs of your customers and think of how you can create something of value for them. It’s better to do something on your own than copy what everyone else does.
Set benchmarks for your company’s growth in the future
It’s a good idea to include companies that are both smaller and bigger than your own. Take a close look at the well-established companies as they will provide you with a model of what success is all about and a reference point against which you can compare your advancements in the future. Researching newer companies in the industry is also a good idea to learn about which companies might threaten your market share in the future.
Competitor Analysis Examples
How do you write a competitor analysis?
How many details you want to include in your eCommerce competitor analysis example will depend on your goals and the stage of your business growth. For instance, if you own a start-up business, you can create a report that mainly focuses on market research. If your company is well-established, you may have to include details on emerging competitors. Here are the steps to follow when writing a competitor analysis report:
Begin by creating an overview of your competitors
To create a solid report, you need to show exactly what your company should beat to find success. You need to audit any service or product that is currently solving the issue your business is also trying to solve. Also, you must write a brief profile for each competitor including details like:
- The market share and revenue of each competitor.
- The size of each competitor and details about their management teams.
- A general description of their weaknesses and strengths.
- An overview of how the customers perceive each company.
This overview will help you get a big-picture view of the market.
Begin your market research to discover industry trends and customer personas
Creating this report requires comprehensive market research. This involves gathering relevant information that will help you understand your customers while identifying opportunities for growth and recognizing industry trends.
This research will also help you put together customer personas that will serve as your guides to your marketing and business decisions. It will also help you plan for any changes that might cause marketplace disruptions. You can conduct market research using the following:
- Online questionnaires or surveys
- Customer interviews
- Focus groups conducted in person
- By purchasing a product of your competitor to examine their delivery and packaging experience
- Reading the records of your company
- Examining the existing economic conditions
- Researching significant technological developments
When putting market research together, consider providing a high-level summary of the current industry trends. You can even include details about the demographics of specific segments. But if you’re working with an adviser or consultant who has difficulties convincing skeptical stakeholders, you will need a good competitor report. Make sure to cover everything from consumer profiles to market forecasts, as these will help you get decision-makers and clients on board.
Use a feature comparison matrix to compare product features
Here, you will compare your product with other products and this is a very important part of the competitor analysis. You need to break down your product and your competitor’s product one feature at a time. You will find out what sets all companies apart. Aside from specific product features, include attributes like:
- Service
- Price
- Product quality
- Ease of use
- Number of features
- Customer support
- Warranties
- Brand, style, or image
The most used format for a features analysis is a simple matrix where you place all businesses on one side and the relevant features on the other. With such a format, you can rate or check how well you perform. Often, the matrix can become very long, and working on it could be very tedious.
If you want to focus on only the things that provide the most value to your customers, you can present your comparisons in a more engaging way by using infographics. It’s recommended to talk to real people who have used your product and the products of your competitors. This will give you a more accurate picture of how your customers perceive the competition.
Summarize using a SWOT analysis
Expect things to get a bit challenging when conducting research for your competitor analysis. First, you will handle volumes of data that many people won’t even understand. This is where SWOT analysis comes in. It’s a framework that will help you evaluate your competitive position by writing down your key Strengths, Weaknesses, Opportunities, and Threats.
It will also serve as a summary of your competitive analysis report for those who don’t want to read all the details. Download a competitor analysis template and use an online SWOT analysis tool to customize your template. Here are the things you need for your SWOT analysis:
- To find out your strengths, learn about what you’re doing really well in terms of products, marketing, sales, technology, branding, and more.
- To find out your weaknesses, learn about the things you’re struggling with and what’s holding you back.
- To find out your opportunities, learn about the weakest area of your biggest competitor, gaps in the existing market that still exist, and any changes that have recently happened to your business or the market.
- To find out your threats, learn about what your biggest competitor does better than you, the new products or features they’re working on, and the issues you aren’t addressing.
You can arrange your SWOT analysis in a list although using color-coded quadrants can be very helpful too.
Find out where your business fits in the competitive market
After the SWOT analysis, the next step is to look at the bigger picture. Based on the analysis, you need to figure out where each of your biggest competitors currently fits into the competitive market. The most common way to do this is by first identifying the dimensions that are most important for significant competitiveness, then plotting those on a matrix.
Focus on where your business fits in the market based on your biggest weaknesses and strengths or the biggest opportunities and threats you identified in your SWOT analysis. You can also summarize in words, the benefits, and features that set your product apart from the competition. This is a good way to end your report on a high note.
